Pembina Pipeline sees demand for potential expansion to Cedar LNG project

The corporate logo of Pembina Pipeline Corp. is shown. THE CANADIAN PRESS/HO

The chief executive of Pembina Pipeline Corp. says he believes there will be enough demand to support an expansion to the Cedar LNG project on the B.C. coast as it looks to sign on more shippers for the first phase now in early construction.

Pembina has shortlisted the preferred counterparties, and has begun negotiating definitive agreements, Scott Burrows told analysts on a conference call Friday to discuss his company’s first-quarter results.

“They’re big, complicated agreements. We’ll do the right deal for Pembina, not the fastest deal for Pembina,” he said.

The US$4-billion floating liquefied natural gas export terminal in Kitimat, B.C., is a partnership between Pembina and the Haisla Nation. The first phase of the project was given the green light almost a year ago and is on track to come into service in late 2028. The cargoes of LNG — gas that has been chilled into a liquid state so it can be transported overseas on specialized tankers — will be bound for high-demand Asian markets.

ARC Resources Ltd. is to supply gas for about half of the plant’s capacity from the Montney shale in northeastern B.C. and northwestern Alberta.

Pembina has been looking to contract out its 1.5-millon-tonne-per-year share of capacity, and Burrows said talks are going well.

Based on conversations around bringing more producers into the first phase, Burrows said it appears a second phase would be welcome.

“Certainly the gas demand is there,” he said. “Based on early-stage negotiations on Cedar capacity, we believe there is demand for a Cedar 2.”

A question mark, however, would be whether there would be enough pipeline capacity to get the gas from inland to the coast, he added.

There are two other B.C. LNG projects in the works. Also in Kitimat, LNG Canada, a partnership between Shell and four Asian partners, is slated to start delivering shipments in the next few months. Meanwhile, Woodfibre LNG, owned by Pacific Energy Corp. and Enbridge Inc., is being built near Squamish, B.C., and is on track to be complete in 2027.

Also Friday, Pembina said it is not seeing a significant near-term financial impact related to Dow Inc.’s delay of a net-zero petrochemical project northeast of Edmonton.

Dow said last month it is still committed to the nearly $9-billion Path2Zero project in Fort Saskatchewan, Alta., but that it has decided to push back the timeline due to weak market conditions.

Pembina was to supply and transport ethane to the project.

“To date, Pembina has not spent material capital to support the ethane supply agreement and will continue to progress these projects, but may now have more time available to execute them,” Burrows said.

On Thursday, Pembina reported earnings of $502 million for the three months ended March 31, up from $438 million during the same period of 2024.

That amounted to 80 cents per diluted share versus 73 cents a year earlier.

Revenue was $2.28 billion, an increase from $1.54 billion.

The Calgary-based company says it doesn’t expect any impact from U.S. tariffs on energy imports this year given much of its business is under contract.

It says it has also not seen any significant decline in activity from producers in Western Canada who use Pembina’s system to get their oil and gas to market.

This report by The Canadian Press was first published May 9, 2025.

Companies in this story: (TSX: PPL)

Lauren Krugel, The Canadian Press